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Retail And Commercial Leases Act

Retail and Commercial Leases Act 1995

Download a copy of the Act here. 

In South Australia, retail shop leases are governed by the Retail and Commercial Leases Act 1995

Although there are some exceptions, a retail shop lease is a lease of premises, situated in a retail shopping centre, at which goods are sold or services are provided to the public.

Key features of the Act include

  • Leases must be for a minimum of five (5) years, including any options to renew. A lease can be for a head term of five (5) years, or any combination that totals five (5) years. For example a lease with a head term of one (1) year, with two rights of renewal for two (2) years each would be in accord with the Act, as the total term is five (5) years. A lease with a head term of two (2) years and one right of renewal for a term of two years would be contrary to the Act, as the total term is only four (4) years.
  • A lessor (landlord) must provide a copy of a proposed lease to any prospective lessee (tenant), when negotiations begin. The lessor must also provide a disclosure statement before a lease is entered into or renewed. The Act and regulations specify what information has to be in the disclosure statement. One month before each accounting period (usually the end of the financial or calender year) the lessor must provide the lessee an estimate of outgoings. This is done in the form of a disclosure statement.
  • Within three (3) months after the end of each accounting period during the term of the lease (usually the end of the financial or calendar year), the lessor must provide to the lessee a written report, prepared by a registered company auditor, containing a statement of all expenditure for outgoings for that accounting period to which the lessee is required to contribute. If there are no outgoings other than Local government rates and charges, water and sewerage rates and charges, and insurance, the report does not have to be prepared by an auditor, but must be accompanied by copies of receipts for all such expenditure.
  • Lessees in a shopping centre have a preferential right of renewal when their lease expires. The legislation sets out the rules that govern the granting of the preferential right.
  • When a lease is assigned (transferred), the continuing liability of a lessee who assigns a lease is limited to a maximum period of two (2) years, provided that the outgoing lessee provides a disclosure statement to the incoming lessee.
  • The Act gives parties to a retail or commercial lease access to mediation to resolve their dispute.

You can download a copy of the Retail and Commercial Leases Act 1995 here. 

Changes to the Retail and Commercial Leases Act 1995

Landlords and tenants in the retail and commercial leasing industry need to be aware of important changes to the Retail and Commercial Leases Act 1995 (the Act) and accompanying Regulations. 

These changes came into force on 1 July 2020. A summary of these changes can be found here.

A copy of the amending Bill as passed by both houses can be found here

From 1 July 2020, at the time when a copy of a proposed lease is provided to a prospective tenant, the landlord or person acting on behalf of the landlord must also provide the prospective lessee with a copy of the Small Business Commissioner’s information brochure, which is referred to as the Retail & Commercial Leasing Guide. Failure to comply with this requirement may result in a penalty of up to $8,000.

A copy of the information brochure which is effective from 1 July 2020, can be found here

Amendments to the Retail and Commercial Leases Act 1995

Changes to the Retail and Commercial Leases Act 1995 were announced by the former Minister for Small Business, Hon Martin Hamilton-Smith MP in July 2017. Read his media release here

At the conclusion of the Parliamentary sitting on Thursday 30 November 2017, the amending bill for the Act was awaiting consideration in the Legislative Council of the Parliament of South Australia after passing through the House of Assembly.

The bill has now lapsed and the new Government is considering its position on the matter. 

The original bills and second reading speeches can be found below.

Retail and Commercial Leases (Miscellaneous) Amendment Bill 2017

Retail and Commercial Leases (Miscellaneous) Amendment Bill 2017 Second Reading Speech

Background

In May 2016, the then Minister for Small Business, Hon Martin Hamilton-Smith MP announced a review of the Retail and Commercial Leases Act 1995, read his media release here

The review was completed in April 2016 by retired District Court Judge Alan Moss. His report, the Moss Review, makes 20 recommendations on a broad range of issues relating to the Act.

Submissions on the recommendations set out in the Moss Review closed on 26 August 2016.

The Small Business Commissioner reviewed the submissions and made a report to the Minister for Small Business.

Submissions received are listed below, unless confidentiality has been requested.

The Moss Review dated 14 April 2016 can be found here and the Retail and Commercial Leases Act 1995 and Regulations can be found here.

SUBMISSIONS RECEIVED

Master Builders South Australia

Buffalo Motor Inn

Pathology Australia

Jack Eskenazi

A & N Chehade Family Trust

Pathology Australia

Andrew Milchem

Motel Mount Gambier

Dymocks

Mandana

Nando's

Suzanne Grae

Sussan

Sportsgirl

Subway Realty Pty Ltd

Electronics Boutique Australia Pty Ltd

Subway

The Lease Bureau

Gametraders

Optus

SA Lease Management

Cue Clothing Co.

District Council of Grant

Registrar-General

Business SA

Parish Property Consultants

Cohen Group

Workskil Australia

Law Society of SA

Resolution Institute

JLL Australia

Valuer-General

Survey and Spatial Sciences Institute South Australia

Michael Psarros

Real Estate Institute of South Australia

Lease1

Robert Saunders & Associates

Property Council of Australia

Harold Gallasch

Australian Property Institute

Jewellers Association of Australia

Liquid Property Consultants

Pharmacy Guild of Australia

Shopping Centre Council of Australia

Scentre Group

Australian Retailers Association

Local Government Association of South Australia

Bennett Garson Conveyancing

Anonymous

Australian Hotels Association (SA)

Crown Lands Program, Department of Environment, Water and Natural Resources

Australian Institute of Conveyancers (SA Division)

Coles

Franchise Council of Australia

SA Independent Retailers

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